IOC commits to relaxing Olympic advertising restrictions in Germany

The International Olympic Committee (IOC) has committed to relaxing Rule 40 of the Olympic Charter in Germany, which restricts participants in the Olympic Games from advertising, following a ruling from the country’s Federal Cartel Office (Bundeskartellamt). “Our decision grants German athletes more leeway when it comes to marketing themselves during the Olympic Games, for example as far as the use of certain ‘Olympic’ terms or their pictures taken in sports events, or social media activities are concerned”, said Andreas Mundt, President of the Bundeskartellamt, in a statement.

The IOC has also agreed not to exclude German athletes who flout the DOSB’s application of the relaxed Rule from the Olympic Games. But the IOC has confirmed that the relaxation of Olympic advertising restrictions is only applicable to the DOSB’s application of Rule 40 in Germany, and not internationally.

‘Except as permitted by the IOC Executive Board, no competitor, team official or other team personnel who participates in the Olympic Games may allow his person, name, picture or sports performances to be used for advertising purposes during the Olympic Games’, reads Rule 40.3 of the Olympic Charter. This specific section of the Charter had been challenged by the Federal Association of the German Sports Goods Industry (Bundesverband der Sportartikel-Industrie), Athleten Deutschland and two athletes.

The Bundeskartellamt said that the IOC and the German Olympic Committee (DOSB) have entered into a ‘commitment agreement’ to relax Rule 40’s application in Germany. The agreement specifies that:

• Advertising activities during the Olympic Games no longer have to be notified to the DOSB three months before the Games, as specified in current DOSB guidelines;
• Ongoing and new advertising activity will be permitted in the future;
• Terms such as ‘Medal, Gold, Silver, Bronze, Winter or Summer Games’ are now permitted;
• Certain competition and non-competition pictures can now be used, as long as they do not contain Olympic symbols;
• Social media is now permitted during the Games;
• Sporting sanctions must not be used in cases where it is alleged that the guidelines have not been complied with, and cases must be decided in civil courts and not at sporting arbitration courts, such as the Court of Arbitration for Sport (CAS).

The Bundeskartellamt will monitor the IOC and DOSB’s compliance with the ‘commitment agreement’.

‘Pursuant to the case-law of the European Court of Justice, the guidelines of a sports association are subject to competition law insofar as they refer to economic activities’, continued the Bundeskartellamt statement, which added that proceedings had been coordinated with the European Commission. ‘Restraints of competition may be justified by legitimate aims, provided that the restraints required to achieve the aims are proportionate. As a legitimate aim for the advertising restrictions, the Bundeskartellamt basically acknowledged the regular event of the Olympic Games by preventing illegal forms of advertising. However, the authority’s preliminary assessment is that the restrictions of advertising opportunities arising from the current application of Rule 40 of the Olympic Charter are too far-reaching and thus constitute abusive conduct. In that respect, especially the case-law of the Federal Court of Justice regarding the German “Olympiaschutzgesetz” (Act on the Protection of the Olympic Emblem and the Olympic Names), was taken into account.’

In May 2015, Athleten Deutschland wrote an extensive letter to the IOC outlining its issues with Rule 40.3. ‘By submitting to the IOC Charter and thus under Rule 40 §3, it is only marginally possible for athletes worldwide to advertise with partners and sponsors in the economically most important phase of their sporting career’, read the letter (PDF below). ‘This period is so important for Olympic athletes in particular because they are rather underrepresented in the media presentation in addition to football coverage. Athletes are losing crucial advertising revenues and possible further partnerships that can contribute to securing their financial and economic situation. In addition, at the Olympic Games, the placed athletes – in contrast, for example, to World or European Championships – get no bonuses. From our point of view, Rule 40 § 3 constitutes an impermissible interference with the constitutionally guaranteed freedom of profession under German and European law and thus with the exercise of the profession as an athlete.

‘With exclusive broadcasting rights and thus also the use of images at the Olympic Games, the IOC will generate revenues of USD 5.7 billion in the 2013-2016 Olympics. Athletes worldwide participate negligibly in the marketing profits of the IOC, even though they provide their far-reaching image and personality rights.’

Great Britain’s Olympic track cycling champion Callum Skinner outlined how one of the aims of new representative body, Global Athlete, was to change Rule 40 to allow athletes to commercially benefit from the Olympics. “Sport has become a full time profession for a lot of people”, he explained in an interview with The Sports Integrity Initiative last month. “We’ve grown away from the amateur status that sport used to be. I wouldn’t want to take money away from the IOC. However the restrictions could be softened. For example, I have a small surveying company that has supported me throughout my career, from when I was young. When I competed at the Games, I wasn’t permitted to Tweet about them before, during, or after the Games.

“Relaxing the rules on the media blackout would cost them nothing. It would also enable athletes to give back to the people that support us, which is an important thing to do. Athletes also explore different revenue streams. A lot of athletes write blogs – for example, I feature quite heavily on my team mate Phil Hines’s blog, and I produced my own during the 2018 Commonwealth Games.

“Yet you are prohibited from making any kind of content within the Olympic Village or the Competition Area venue, which makes this very difficult. It’s about a little bit of modernisation – a little bit of give and take.”

Can Rule 40 be relaxed only in Germany?

The Sports Integrity Initiative asked the IOC whether it expects a challenge to Rule 40 from athletes based in other countries, now that it has agreed that the DOSB should relax the application of Rule 40 in Germany.The IOC replied by underlining that the relaxation of Rule 40 is only applicable in Germany. As such, it would appear that athletes such as Skinner and organisations such as Global Athlete will also have to challenge Rule 40, before the IOC will agree to implement the changes mandated by the Bundeskartellamt internationally.

‘The IOC takes note of the commitment decision of the German Federal Cartel Office (FCO – Bundeskartellamt)’, read an emailed statement. ‘Following this decision, the IOC welcomes the fact that the revised Rule 40 and Social Media Guidelines of the German Olympic Committee (DOSB) will be valid in Germany at least until the end of the Olympic Winter Games 2026.With its decision, the FCO recognised that there are legitimate reasons for restricting individual athletes’ advertising opportunities in order to ensure the ongoing organisation of the Olympic Games. At the same time, any implementation of Rule 40 at the national level necessarily has to take all applicable laws and regulations as well as pertinent case law into account, in this instance, particular German case law.

‘The revised Rule 40 and Social Media Guidelines of the DOSB are the result of a mutual agreement reached by the FCO, the IOC and the DOSB. Rule 40 is the fundamental basis for the solidarity model of the Olympic Games. This model is in the interest of athletes from all around the world and the Olympic Movement. It ensures that the whole world can come together at the Games. It helps to offer athletes from all 206 National Olympic Committees (NOCs) an equal opportunity to train and qualify for the Olympic Games. Through this model, the Olympic Games can also continue to be a platform for a wide range of sports.

‘The IOC redistributes 90 per cent of its income to the wider sporting movement, which means that every day the equivalent of USD 3.4 million goes to help athletes, Organising Committees of the Olympic Games and sports organisations at all levels around the world.In addition, Rule 40 helps ensure the stability of the financing of the Olympic Movement, in particular the Olympic Games and Olympic teams around the world. The Rule helps protect the rights of the entities that provide funding: primarily the IOC’s Worldwide Olympic Partners, the NOCs’ sponsors, and the sponsors of the Organising Committees of the respective Olympic Games. The Games take place in a largely non-commercialised field-of-play environment. As a result, the Rule helps by limiting advertising measures undertaken by non-Olympic sponsors with participants in the Olympic Games, which create an unauthorised association with the Olympic Games without the sponsors in question having made a financial contribution to the organisation of the Games.’

However, as Germany’s Federal Cartel Office has ruled that the application of Rule 40 in Germany by the DOSB constitutes ‘abusive conduct’ under its assessment of European Union law, challenges in other jurisdictions may now be possible. And as the Bundeskartellamt issued its ruling in consultation with the European Commission, other competition authorities are likely to take it into consideration.